Spouses Beltran

Vs.
Spouses Cangayda

Facts:
- Spouses verbally agreed to sell disputed property to petitioners
- Petitioners made initial payments and subsequent payments
- Petitioners failed to pay off remaining balance despite repeated demands
- Parties signed an amicable settlement, however, petitioners failed to settle obligation
- Respondents filed a complaint for recovery of possession and damages. In their answer,
petitioners failed to settle the balance because respondents refused to accept their
payment.
- RTC characterized the oral argument as a contract to sell
- RTC denied petitioner’s motion for reconsideration
- Petitioners brought the case to CA, which dismissed the appeal
Issues:
- Whether or not CA erred in affirming the oral argument as a contract to sell
Ruling:
- Petition is granted
Basis:
- Contract of sale – title passes to the vendee upon delivery of the thing sold
- Contract to sell – ownership is reserved in the vendee and is not passed until the full
payment of the price
Racelis
Vs.
Spouses Javier

Facts:
- Spouses Javier offered to purchase the Marikina property from Racelis. Since they could
not afford the original price of 3.5 Million pesos, they offered to lease the property.
- Petitioner agreed to a month-to-month and rent of 10K per month, which was then
increased to 11 thousand pesos.
- The property was used as their residence and site of their tutorial school.
- Spouses Javier tendered the sum of 65 thousand pesos representing initial payment. On
several occasions, they tendered small sums of money, but by the end of 2003, they only
delivered a total of 78 thousand pesos, while continuing to lease the property. They
continued to pay rent, but failed behind by Feb 2004.
- Racelis then informed them of the intention to terminate the lease, and demanded they
vacate the premises immediately. Spouses Javier refused to vacate the premises because
of their tutorial business. They then wrote Racelis, informing them of the reason why
they could not purchase the entire property at 3.5 million, while stating that the 78
thousand was advanced rent.
- Racelis disagreed, and both failed to reach a settlement. Spouses Javier refused to vacate
the premises. Racelis filed for ejectment.
- In their answer, spouses Javier averred that they never agreed to purchase the property
from Racelis, and that the 78 thousand was actually advanced rent.
- During trial, the Spouses Javier vacated the property and moved to their new residence at
Greenheights Subdivision on September 26, 2004. The Metropolitan Trial Court then
determined that the only issue left to be resolved was the amount of damages in the form
of unpaid rentals to which Racelis was entitled.
- On August 19, 2005, the Metropolitan Trial Court rendered a Decision43 dismissing the
complaint. It ruled that the Spouses Javier were entitled to suspend the payment of rent
under Article 1658 of the Civil Code due to Racelis' act of disconnecting electric service
over the property. The Metropolitan Trial Court declared that the Spouses Javier's
obligation had been extinguished. Their advanced rent and deposit were sufficient to
cover their unpaid rent. The Metropolitan Trial Court however, did not characterize the
78 thousand as advanced rent, but as earnest money. Accordingly, Racelis was ordered to
return the 78 thousand due to her waiver in the Letter dated March 4, 2004.
- Regional Trial Court reversed the appeal, and held that the spouses Javier were not
justified in suspending rental payments because they entered into two distinct contracts –
a lease contract, and a contract of sale. RTC ruled that the 78 thousand was part of the
purchasing price.
- On January 13, 2009, the Court of Appeals rendered a Decision53 declaring the Spouses
Javier justified in withholding rental payments due to the disconnection of electrical
service over the property.
Issue
- Whether or not respondent spouses can invoke their right to suspend the payment of rent
under art 1658 of the Civil Code.
Ruling
- Petition for Review is GRANTED. The January 13, 2009 Decision and September 17,
2009 Resolution of the Court of Appeals in CA-G.R. SP No. 98928
are REVERSED and SET ASIDE. Respondents Spouses Germil and Rebecca Javier are
ordered to pay petitioner Vanessa N. Racelis the sum of P54,000.00, representing accrued
rentals, with interest at the rate of six percent (6%) per annum from the date of the
finality of this judgment until fully paid.
Reason
- Article 1658 of the Civil Code allows a lessee to postpone the payment of rent if the
lessor fails to either (1) "make the necessary repairs" on the property or (2) "maintain the
lessee in peaceful and adequate enjoyment of the property leased." This provision
implements the obligation imposed on lessors under Article 1654(3) of the Civil Code.
- The failure to maintain the lessee in the peaceful and adequate enjoyment of the property
leased does not contemplate all acts of disturbance. Lessees may suspend the payment of
rent under Article 1658 of the Civil Code only if their legal possession is disrupted.
- In this case, the disconnection of electrical service over the leased premises on May 14,
200474 was not just an act of physical disturbance but one that is meant to remove
respondents from the leased premises and disturb their legal possession as lessees.
Ordinarily, this would have entitled respondents to invoke the right accorded by Article
1658 of the Civil Code.
- However, this rule will not apply in the present case because the lease had already
expired when petitioner requested for the temporary disconnection of electrical service.
Petitioner demanded respondents to vacate the premises by May 30, 2004. Instead of
surrendering the premises to petitioner, respondents unlawfully withheld possession of
the property.
- Respondents continued to stay in the premises until they moved to their new residence on
September 26, 2004. At that point, petitioner was no longer obligated to maintain
respondents in the "peaceful and adequate enjoyment of the lease for the entire duration
of the contract. Therefore, respondents cannot use the disconnection of electrical service
as justification to suspend the payment of rent.
- Moreover, respondents' obligation to pay rent was not extinguished when they transferred
to their new residence. Respondents are liable for a reasonable amount of rent for the use
and continued occupation of the property upon the expiration of the lease. To hold
otherwise would unjustly enrich respondents at petitioner's expense.
Hospicio de San Jose Barili, Cebu City
Vs.
Department of Agrarian Reform

Facts
- Petitioner is a charitable organization created as a body corporate in 1925 by Act No.
3239. The law was enacted in order to formally accept the offer made by Pedro Cui and
Benigna Cui to establish a home for the care and support, free of charge, of indigent
invalids and incapacitated and helpless persons.
- Section 4 of Act No. 3239 provides that "[t]he personal and real property donated to the
[Hospicio] by its founders or by other persons shall not be sold under any consideration."
- On 10 October 1987, the Department of Agrarian Reform Regional Office (DARRO)
Region VII issued an order ordaining that two parcels of land owned by the Hospicio be
placed under Operation Land Transfer in favor of twenty-two (22) tillers thereof as
beneficiaries. The Hospicio filed a motion for the reconsideration of the order with the
Department of Agrarian Reform (DAR) Secretary, citing the aforementioned Section 4 of
Act No. 3239. It argued that Act No. 3239 is a special law, which could not have been
repealed by P.D. No. 27, a general law, or by the latter's general repealing clause.
- The DAR Secretary rejected the motion for reconsideration, holding that P.D. No. 27 was
a special law, as it applied only to particular individuals in the State, specifically the
tenants of rice and corn lands.
- Section 4 of Act No. 3239 prohibits the sale "under any consideration" of the lands
donated to the Hospicio. But the land transfers mandated under P.D. No. 27 cannot be
considered a conventional sale under our civil laws.
- In this case, the deprivation of the Hospicio's property did not arise as a consequence of
the Hospicio's consent to the transfer. There was no meeting of minds between the
Hospicio, on one hand, and the DAR or the tenants, on the other, on the properties and
the cause which are to constitute the contract that is to serve ultimately as the basis for
the transfer of ownership of the subject lands. Instead, the obligation to transfer arises by
compulsion of law, particularly P.D. No. 27.
Issue
- Whether the sale prohibited under Section 4 of Act No. 3239 includes even a forced sale.
Ruling
- Petition is DENIED. No pronouncement as to costs.
Reason
- No séance is required to discern the intent of Section 4. It ensures that the properties
received by the Hospicio are not alienated for profit by the officers or administrators, in
 contravention of the charitable purpose for which the Hospicio was created. To an extent,
it makes possible the perpetual operation of the Hospicio, which was empowered by law
to operate for an indefinite period, by assuring the existence of the property on which the
Hospicio could operate. We also do not doubt that whatever fruits of the forcibly retained
property would also serve a source of funding for the operations of the Hospicio.
- Was it the intent of the framers of Act No. 3239 to exempt the Hospicio from all judicial
processes, even those arising from civil transactions? We do not think so. The
contemporaneous construction of Section 4 indicates that the prohibition intended by the
crafters of the law pertained only to conventional sales, and not forced sales. The law was
promulgated in 1925, or when the Spanish Civil Code of 1889 was in effect. The
provisions in the Civil Code referring to "forced sales" were not derived from the Spanish
Civil Code
- Evidently, the word "sale," as contemplated by the framers of the law in 1925, pertains to
its concept in civil law, with the requisite of consent being present. It cannot refer to sales
or dispositions that arise by operation of law, such as through judicial execution, or, as in
this case, expropriation.
- Nonetheless, even assuming for the nonce that Section 4 contemplates even forced sales
such as those through expropriation, we would agree with the DAR Secretary and the
Court of Appeals that Section 4 is deemed repealed by P.D. No. 27 and the CARL.
- Should we construe Section 4 of Act No. 3239 as barring forced sales through
expropriation of the properties of the Hospicio, such prohibition would irreconcilably
countermand both P.D. No. 27 and the CARL and their mandate to subject the properties
to agrarian reform. The general repealing clauses of the two later laws would then
sufficiently repeal Section 4 of Act No. 3239, to the extent that it may prohibit
expropriation of agricultural lands for agrarian reform.
Spouses Viloria
Vs.
Continental Airlines

Facts
- On or about July 21, 1997 and while in the United States, Fernando purchased for himself
and his wife, Lourdes, two (2) round trip airline tickets from San Diego, California to
Newark, New Jersey on board Continental Airlines. Fernando purchased the tickets at
US$400.00 each from a travel agency called "Holiday Travel" and was attended to by a
certain Margaret Mager (Mager). According to Spouses Viloria, Fernando agreed to buy
the said tickets after Mager informed them that there were no available seats at Amtrak,
an intercity passenger train service provider in the United States. Per the tickets, Spouses
Viloria were scheduled to leave for Newark on August 13, 1997 and return to San Diego
on August 21, 1997.
- Subsequently, Fernando requested Mager to reschedule their flight to Newark to an
earlier date or August 6, 1997. Mager informed him that flights to Newark via
Continental Airlines were already fully booked and offered the alternative of a round trip
flight via Frontier Air. 
- Subsequently, Fernando requested Mager to reschedule their flight to Newark to an
earlier date or August 6, 1997. Mager informed him that flights to Newark via
Continental Airlines were already fully booked and offered the alternative of a round trip
flight via Frontier Air. Since flying with Frontier Air called for a higher fare of
US$526.00 per passenger and would mean traveling by night, Fernando opted to request
for a refund. Mager, however, denied his request as the subject tickets are non-refundable
and the only option that Continental Airlines can offer is the re-issuance of new tickets
within one (1) year from the date the subject tickets were issued. Fernando decided to
reserve two (2) seats with Frontier Air.
- Due to second thoughts on traveling via Frontier Air, Fernando went to the Greyhound
Station where he saw an Amtrak station nearby. Fernando made inquiries and was told
that there are seats available and he can travel on Amtrak anytime and any day he
pleased. From Amtrak, Fernando went to Holiday Travel and confronted Mager with the
Amtrak tickets, telling her that she had misled them into buying the Continental Airlines
tickets by misrepresenting that Amtrak was already fully booked. He couldn’t get a
refund, however, because the subject tickets were non-refundable.
- Upon returning to the Philippines, Fernando sent a letter to CAI on February 11, 1998,
demanding a refund and alleging that Mager had deluded them into purchasing the
subject tickets.
- In a letter dated March 24, 1998, Continental Micronesia denied Fernando’s request for a
refund and advised him that he may take the subject tickets to any Continental ticketing
location for the re-issuance of new tickets within two (2) years from the date they were
 issued. Continental Micronesia informed Fernando that the subject tickets may be used as
a form of payment for the purchase of another Continental ticket, albeit with a re-
issuance fee.
- In a letter dated June 21, 1999, Fernando demanded for the refund of the subject tickets
as he no longer wished to have them replaced. In addition to the dubious circumstances
under which the subject tickets were issued, Fernando claimed that CAI’s act of charging
him with US$1,867.40 for a round trip ticket to Los Angeles, which other airlines priced
at US$856.00, and refusal to allow him to use Lourdes’ ticket, breached its undertaking
under its March 24, 1998 letter
- On September 8, 2000, Spouses Viloria filed a complaint against CAI, praying that CAI
be ordered to refund the money they used in the purchase of the subject tickets with legal
interest from July 21, 1997 and to pay ₱1,000,000.00 as moral damages, ₱500,000.00 as
exemplary damages and ₱250,000.00 as attorney’s fees.
RTC’s ruling
- RTC rendered its April 3, 2006 Decision, holding that Spouses Viloria are entitled to a
refund in view of Mager’s misrepresentation in obtaining their consent in the purchase of
the subject tickets.
- Citing Articles 1868 and 1869 of the Civil Code, the RTC ruled that Mager is CAI’s
agent, hence, bound by her bad faith and misrepresentation. As far as the RTC is
concerned, there is no issue as to whether Mager was CAI’s agent in view of CAI’s
implied recognition of her status as such in its March 24, 1998 letter.

- Agency may be oral, unless the law requires a specific form.

- As its very name implies, a travel agency binds itself to render some service or to do
something in representation or on behalf of another, with the consent or authority of the
latter. This court takes judicial notice of the common services rendered by travel agencies
that represent themselves as such, specifically the reservation and booking of local and
foreign tours as well as the issuance of airline tickets for a commission or fee.

Appelate Court’s ruling

- On appeal, the CA reversed the RTC’s April 3, 2006 Decision, holding that CAI cannot
be held liable for Mager’s act in the absence of any proof that a principal-agent
relationship existed between CAI and Holiday Travel. According to the CA, Spouses
Viloria, who have the burden of proof to establish the fact of agency, failed to present
evidence demonstrating that Holiday Travel is CAI’s agent. Furthermore, contrary to
Spouses Viloria’s claim, the contractual relationship between Holiday Travel and CAI is
not an agency but that of a sale.
- The CA also ruled that refund is not available to Spouses Viloria as the word "non-
refundable" was clearly printed on the face of the subject tickets, which constitute their
contract with CAI. Therefore, the grant of their prayer for a refund would violate the
proscription against impairment of contracts.
 Petitioner’s case
- Spouses Viloria claim that CAI acted in bad faith when it required them to pay a higher
amount for a round trip ticket to Los Angeles considering CAI’s undertaking to re-issue
new tickets to them within the period stated in their March 24, 1998 letter. CAI likewise
acted in bad faith when it disallowed Fernando to use Lourdes’ ticket to purchase a round
trip to Los Angeles given that there is nothing in Lourdes’ ticket indicating that it is non-
transferable. As a common carrier, it is CAI’s duty to inform its passengers of the terms
and conditions of their contract and passengers cannot be bound by such terms and
conditions which they are not made aware of.
Respondent’s case
- In its Comment, CAI claimed that Spouses Viloria’s allegation of bad faith is negated by
its willingness to issue new tickets to them and to credit the value of the subject tickets
against the value of the new ticket Fernando requested. CAI argued that Spouses
Viloria’s sole basis to claim that the price at which CAI was willing to issue the new
tickets is unconscionable is a piece of hearsay evidence – an advertisement appearing on
a newspaper stating that airfares from Manila to Los Angeles or San Francisco cost
US$818.00.
- Also, the advertisement pertains to airfares in September 2000 and not to airfares
prevailing in June 1999, the time when Fernando asked CAI to apply the value of the
subject tickets for the purchase of a new one.
- With respect to Spouses Viloria’s claim that they are not aware of CAI’s restrictions on
the subject tickets and that the terms and conditions that are printed on them are
ambiguous, CAI denies any ambiguity and alleged that its representative informed
Fernando that the subject tickets are non-transferable when he applied for the issuance of
a new ticket. On the other hand, the word "non-refundable" clearly appears on the face of
the subject tickets.
Issues:

a. Does a principal-agent relationship exist between CAI and Holiday Travel?

b. Assuming that an agency relationship exists between CAI and Holiday Travel, is CAI
bound by the acts of Holiday Travel’s agents and employees such as Mager?

c. Assuming that CAI is bound by the acts of Holiday Travel’s agents and employees, can
the representation of Mager as to unavailability of seats at Amtrak be considered
fraudulent as to vitiate the consent of Spouse Viloria in the purchase of the subject
tickets?

d. Is CAI justified in insisting that the subject tickets are non-transferable and non-
refundable?
 e. Is CAI justified in pegging a different price for the round trip ticket to Los Angeles
requested by Fernando?

f. Alternatively, did CAI act in bad faith or renege its obligation to Spouses Viloria to
apply the value of the subject tickets in the purchase of new ones when it refused to allow
Fernando to use Lourdes’ ticket and in charging a higher price for a round trip ticket to
Los Angeles?

Ruling

- Instant petition is denied

Reason:

- First issue – principal-agent relationship exists between the CAI and Holiday Travel
Tours

- According to the CA, agency is never presumed and that he who alleges that it exists has
the burden of proof. Spouses Viloria, on whose shoulders such burden rests, presented
evidence that fell short of indubitably demonstrating the existence of such agency.

- We disagree. The CA failed to consider undisputed facts, discrediting CAI’s denial that
Holiday Travel is one of its agents. Furthermore, in erroneously characterizing the
contractual relationship between CAI and Holiday Travel as a contract of sale, the CA
failed to apply the fundamental civil law principles governing agency and differentiating
it from sale.

- In Rallos v. Felix Go Chan & Sons Realty Corporation, this Court explained the nature of
an agency and spelled out the essential elements thereof:

- Out of the above given principles, sprung the creation and acceptance of the relationship
of agency whereby one party, called the principal (mandante), authorizes another, called
the agent (mandatario), to act for and in his behalf in transactions with third persons. The
essential elements of agency are: (1) there is consent, express or implied of the parties to
establish the relationship; (2) the object is the execution of a juridical act in relation to a
third person; (3) the agent acts as a representative and not for himself, and (4) the agent
acts within the scope of his authority.1avvphi1

- Agency is basically personal, representative, and derivative in nature. The authority of

the agent to act emanates from the powers granted to him by his principal; his act is the
act of the principal if done within the scope of the authority. Qui facit per alium facit se.
"He who acts through another acts himself."

- As categorically provided under Article 1869 of the Civil Code, "[a]gency may be
express, or implied from the acts of the principal, from his silence or lack of action, or his
 failure to repudiate the agency, knowing that another person is acting on his behalf
without authority."

- Since the company retained ownership of the goods, even as it delivered possession unto
the dealer for resale to customers, the price and terms of which were subject to the
company's control, the relationship between the company and the dealer is one of agency

- Second issue - In actions based on quasi-delict, a principal can only be held liable for
the tort committed by its agent’s employees if it has been established by
preponderance of evidence that the principal was also at fault or negligent or that
the principal exercise control and supervision over them.

- Spouses Viloria’s cause of action on the basis of Mager’s alleged fraudulent

misrepresentation is clearly one of tort or quasi-delict, there being no pre-existing
contractual relationship between them. Therefore, it was incumbent upon Spouses Viloria
to prove that CAI was equally at fault.

- However, the records are devoid of any evidence by which CAI’s alleged liability can be
substantiated. Apart from their claim that CAI must be held liable for Mager’s supposed
fraud because Holiday Travel is CAI’s agent, Spouses Viloria did not present evidence
that CAI was a party or had contributed to Mager’s complained act either by instructing
or authorizing Holiday Travel and Mager to issue the said misrepresentation.

- In Belen v. Belen, this Court ruled that it was enough for defendant to deny an alleged
employment relationship. The defendant is under no obligation to prove the negative
averment. This Court said:

- "It is an old and well-settled rule of the courts that the burden of proving the action is
upon the plaintiff, and that if he fails satisfactorily to show the facts upon which he bases
his claim, the defendant is under no obligation to prove his exceptions. This [rule] is in
harmony with the provisions of Section 297 of the Code of Civil Procedure holding that
each party must prove his own affirmative allegations, etc." (citations omitted)

- Therefore, without a modicum of evidence that CAI exercised control over Holiday
Travel’s employees or that CAI was equally at fault, no liability can be imposed on CAI
for Mager’s supposed misrepresentation.

- Third issue - Even on the assumption that CAI may be held liable for the acts of
Mager, still, Spouses Viloria are not entitled to a refund. Mager’s statement cannot
be considered a causal fraud that would justify the annulment of the subject
contracts that would oblige CAI to indemnify Spouses Viloria and return the money
they paid for the subject tickets.

- Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of
the contracting parties was obtained through fraud, the contract is considered voidable
and may be annulled within four (4) years from the time of the discovery of the fraud.
 Once a contract is annulled, the parties are obliged under Article 1398 of the same Code
to restore to each other the things subject matter of the contract, including their fruits and
interest.

- Under Article 1338 of the Civil Code, there is fraud when, through insidious words or
machinations of one of the contracting parties, the other is induced to enter into a contract
which, without them, he would not have agreed to. In order that fraud may vitiate
consent, it must be the causal (dolo causante), not merely the incidental (dolo incidente),
inducement to the making of the contract.

- After meticulously poring over the records, this Court finds that the fraud alleged by
Spouses Viloria has not been satisfactorily established as causal in nature to warrant the
annulment of the subject contracts. In fact, Spouses Viloria failed to prove by clear and
convincing evidence that Mager’s statement was fraudulent. Specifically, Spouses Viloria
failed to prove that (a) there were indeed available seats at Amtrak for a trip to New
Jersey on August 13, 1997 at the time they spoke with Mager on July 21, 1997; (b)
Mager knew about this; and (c) that she purposely informed them otherwise.

- Fourth issue - Assuming the contrary, Spouses Viloria are nevertheless deemed to
have ratified the subject contracts.

- Ratification of a voidable contract is defined under Article 1393 of the Civil Code as
follows:

- Art. 1393. Ratification may be effected expressly or tacitly. It is understood that there is a
tacit ratification if, with knowledge of the reason which renders the contract voidable and
such reason having ceased, the person who has a right to invoke it should execute an act
which necessarily implies an intention to waive his right.

- Implied ratification may take diverse forms, such as by silence or acquiescence; by acts
showing approval or adoption of the contract; or by acceptance and retention of benefits
flowing therefrom.

- Simultaneous with their demand for a refund on the ground of Fernando’s vitiated
consent, Spouses Viloria likewise asked for a refund based on CAI’s supposed bad faith
in reneging on its undertaking to replace the subject tickets with a round trip ticket from
Manila to Los Angeles.

- In doing so, Spouses Viloria are actually asking for a rescission of the subject contracts
based on contractual breach. Resolution, the action referred to in Article 1191, is based
on the defendant’s breach of faith, a violation of the reciprocity between the parties

- Fifth issue - Contracts cannot be rescinded for a slight or casual breach

- Article 1191, as presently worded, states:

- The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.

- The injured party may choose between the fulfilment and the rescission of the obligation,
with the payment of damages in either case. He may also seek rescission, even after he
has chosen fulfillment, if the latter should become impossible

- According to Spouses Viloria, CAI acted in bad faith and breached the subject contracts
when it refused to apply the value of Lourdes’ ticket for Fernando’s purchase of a round
trip ticket to Los Angeles and in requiring him to pay an amount higher than the price
fixed by other airline companies.

- In its March 24, 1998 letter, CAI stated that "non-refundable tickets may be used as a
form of payment toward the purchase of another Continental ticket for $75.00, per ticket,
reissue fee ($50.00, per ticket, for tickets purchased prior to October 30, 1997)."

- Clearly, there is nothing in the above-quoted section of CAI’s letter from which the
restriction on the non-transferability of the subject tickets can be inferred. In fact, the
words used by CAI in its letter supports the position of Spouses Viloria, that each of them
can use the ticket under their name for the purchase of new tickets whether for
themselves or for some other person.

Spouses Padua, GR no. 165420

Facts:

- In her complaint for partition of real property, annulment of titles with

damages, Concepcion Ainza (Concepcion) alleged that respondent-spouses Eugenia
(Eugenia) and Antonio Padua (Antonio) owned a 216.40 sq. m. lot with an unfinished
residential house located at No. 85-A Durian corner Pajo Sts., Barangay Quirino 2-C,
Project 2, Quezon City, covered by Transfer Certificate of Title No. 271935. Sometime in
April 1987, she bought one-half of an undivided portion of the property from her
daughter, Eugenia and the latter’s husband, Antonio, for One Hundred Thousand Pesos
(P100,000.00).
- No Deed of Absolute Sale was executed to evidence the transaction, but cash payment
was received by the respondents, and ownership was transferred to Concepcion through
physical delivery to her attorney-in-fact and daughter, Natividad Tuliao (Natividad).
Concepcion authorized Natividad and the latter’s husband, Ceferino Tuliao (Ceferino) to
occupy the premises, and make improvements on the unfinished building.

- Thereafter, Concepcion alleged that without her consent, respondents caused the
subdivision of the property into three portions and registered it in their names under TCT
Nos. N-155122, N-155123 and N-155124 in violation of the restrictions annotated at the
back of the title.

- Antonio requested Natividad to vacate the premises but the latter refused and claimed
that Concepcion owned the property. Antonio thus filed an ejectment suit on April 1,
1999. Concepcion, represented by Natividad, also filed on May 4, 1999 a civil case for
partition of real property and annulment of titles with damages.

- On January 9, 2001, the Regional Trial Court of Quezon City, Branch 85, rendered
judgment in favor of Concepcion.

- The trial court upheld the sale between Eugenia and Concepcion. It ruled that the sale
was consummated when both contracting parties complied with their respective
obligations. Eugenia transferred possession by delivering the property to Concepcion
who in turn paid the purchase price. It also declared that the transfer of the property did
not violate the Statute of Frauds because a fully executed contract does not fall within its
coverage.

Issue:

- The sole issue for resolution in this petition for review is whether there was a valid
contract of sale between Eugenia and Concepcion.

Ruling

- Petition is granted

Reason

- In this case, there was a perfected contract of sale between Eugenia and Concepcion. The
records show that Eugenia offered to sell a portion of the property to Concepcion, who
accepted the offer and agreed to pay P100,000.00 as consideration. The contract of sale
was consummated when both parties fully complied with their respective obligations.
 Eugenia delivered the property to Concepcion, who in turn, paid Eugenia the price of One
Hundred Thousand Pesos (P100,000.00), as evidenced by the receipt

- The verbal contract of sale between Eugenia and Concepcion did not violate the
provisions of the Statute of Frauds that a contract for the sale of real property shall be
unenforceable unless the contract or some note or memorandum of the sale is in writing
and subscribed by the party charged or his agent. When a verbal contract has been
completed, executed or partially consummated, as in this case, its enforceability will not
be barred by the Statute of Frauds, which applies only to an executory agreement. Thus,
where one party has performed his obligation, oral evidence will be admitted to prove the
agreement.

- In the instant case, the oral contract of sale between Eugenia and Concepcion was
evidenced by a receipt signed by Eugenia. Antonio also stated that his wife admitted to
him that she sold the property to Concepcion.